- Despite global headwinds, the wearables market will expand modestly in 2020, with stronger growth from 2021.
- Online distribution channels have proven especially robust in the face of disruption from the pandemic, although sales through traditional stores have been disrupted.
- Demand is being fuelled by new customers buying wearables to better understand their health and well-being.
- The market is expected to recover to pre-pandemic levels of growth from 2021.
London, 29 September 2020: While the challenges caused by the Covid-19 pandemic are being felt by many segments of the technology sector, wearables have proven resilient, with some growth expected in 2020 followed by a return to stronger performance in 2021. These are the findings of the latest market forecast from technology analyst firm CCS Insight.
In its global forecast, CCS Insight expects that 169 million wearable devices will be sold in 2020, a rise of 7% from the previous year. Growth was slow in the first half of the year owing to disruption of the supply chain and store closures amid the global Covid-19 pandemic. However, growth is expected to pick up, albeit tentatively, for the holiday season, with new devices by leading makers including Apple, Fitbit and Samsung poised to prove popular. In the longer term, growth is expected to recover strongly as supressed demand carries over into coming years, with sales of more than 300 million units predicted in 2024.
Marina Koytcheva, Vice President of Forecasting at CCS Insight, commented, “The wearables category enjoyed strong momentum before the pandemic, with most of its growth fuelled by new customers rather than existing ones. Although more-established segments of the consumer tech market, such as smartphones, have seen a sharp slowdown of upgrade sales thanks to uncertainty caused by the pandemic, wearables manufacturers have managed to sustain good interest from first-time customers”.
Leo Gebbie, Senior Analyst for Wearables, added, “Our research has shown that health- and fitness-tracking capabilities on wearables are extremely popular with customers, and are some of the most important reasons that people choose to buy smartwatches and fitness trackers. We believe that during the health crisis people have become more focussed than ever on tracking their well-being, leading many to consider buying a wearable. New devices like the Apple Watch Series 6, Fitbit Sense and Samsung Galaxy Watch3 should lure customers thanks to their advanced sensors”.
The first half of 2020 was challenging for many wearables companies. Smartwatches and fitness trackers, which normally sell well online, posted a reasonable performance, but those that sell through traditional channels such as high-street stores were significantly hit. Koytcheva noted, “The wearables market is highly seasonal, with many manufacturers seeing a spike in sales in the lucrative Christmas quarter. In a good year, their current product line-ups would have generated great demand. However, this year the economic recession and job uncertainty will force many people to be more careful with their spending, so we may see much softer growth in demand for smart wearables in the remainder of 2020”.
One segment that has suffered a clear drop in sales in 2020 is connected smartwatches for kids. In China, where these devices are most popular, sales are expected to drop by about 8 million units compared with 2019, when a solid 28 million gadgets were sold. This is because of weak demand as children have been kept at home by lockdown restrictions. However, CCS Insight expects devices aimed at kids and elderly users to grow strongly over the next few years, not just in China but also in the US and Western Europe, reaching sales of 40 million devices globally in 2024.
Koytcheva noted, “Although wearables will experience limited growth in 2020, we expect the market to recover quickly once the worst months of the Covid-19 pandemic and the global recession have been navigated. Our research shows strong interest in wearables, especially for smartwatches, and we predict that growth will return to the levels seen before this year’s dip. China will play an important role in this recovery, continuing to be home to the largest global market for wearable devices”.
A summary of CCS Insight’s new forecast is presented below.
More details of CCS Insight’s extensive wearables research service can be found at: www.ccsinsight.com/research-areas/wearables/
Notes to editors
CCS Insight is a leading provider of research on the wearables market. This forecast is part of a broader suite of research into wearables, including an extensive database of devices in this area, regular reports and updates on the latest announcements, events and news.
About CCS Insight
CCS Insight is a global analyst company focussing on current and future trends in technology. It provides comprehensive services that are tailored to meet the needs of individual clients, helping them make sense of the connected world. Follow @CCSInsight on Twitter or learn more at www.ccsinsight.com.
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